An Examination of Pricing and Non-Pricing Determinants of Total Factor Productivity in Iran’s Agricultural Sector

  The objective of the present study is to apply an ordinary least square technique to a data set of the period 1968-2007 to examine effective pricing and non- pricing determinants of total factor productivity in Iran’s agricultural sector. An index for total factor productivity is estimated by application of Cobb-Douglas production function. The results indicate that non-pricing determinants, excluding economic efficiency, have positive and significant relationship with total factor productivity; while Inflation rate, and the dummy variable representing drought have significant and negative relationship with total factor productivity. The impact of exchange policies on the mentioned productivity is positive but statistically insignificant. Macroeconomic policies can influence the growth of total factor productivity through the change of price factors in parallel with non-price factors.